The Biden administration appointed individuals to key antitrust positions within the Federal Commerce Fee and the Antitrust Division on the US Division of Justice who, usually, promised to make antitrust regulation harder. I’ve written right here earlier than about questions of doctrine: that’s, how ought to antitrust instances be evaluated? However there’s additionally a extra primary query: what adjustments in mergers and enforcement have really occurred?
Underneath the Hart-Scott-Rodino Act of 1976, all proposed mergers and acquisitions above a minimal threshold measurement should be reported to the US authorities, which provides the antitrust authorities an opportunity to look them over upfront. In 2024, the minimal threshold measurement over which a transaction wanted to be reported upfront was $119.5 million. Annually, the Federal Commerce Fee and the Antitrust Division of the US Division of Justice report on the transactions from the earlier 12 months, in addition to what enforcement actions have been taken. The newest is the forty seventh Hart-Scott-Rodino Annual Report (FY 2024). Thus, the report is an opportunity to see what the newly aggressive antitrust directors of the Biden administration did by 2024.
As a place to begin, listed below are the variety of proposed merger reported below the Hart-Scott-Rodino guidelines. Clearly, there’s a good quantity of year-to-year variation: for instance, the low stage in 2020 might be attributable partially to the disruptions of the pandemic. The upper ranges in 2021 and 2022 have been partly a bounceback from the pandemic 12 months, but additionally there was some speak within the monetary press that companies have been attempting to finish transactions earlier than the brand new Biden antitrust warriors wrote a brand new set of latest merger tips. The drop within the final two years is basically again to pre-pandemic ranges. A part of the difficulty right here is that a minimum of some merger transactions are financed by debt, which is much less engaging when rates of interest go up. Total, it appears honest to say that the variety of proposed mergers in 2024 was near-average for the the earlier decade.
Was there an impact on the common measurement of mergers? Right here, the sample is extra clear: The share of proposed mergers with worth of greater than $1 billion has risen considerably within the lat few years.
When the FTC and the DoJ are notified of a possible merger, they’ll both enable it to proceed with out problem or they’ll put in a “second request” that expresses concern and asks for extra data. This “second request” share is all the time fairly low. In any case, the presumption of antitrust authorities is that they don’t seem to be second-guessing whether or not a proposed deal can be a money-maker, however solely whether or not it poses a danger of lowered competitors. Additionally, the antitrust authorities have restricted budgetary assets and want to select and select. That stated, the share of transactions getting “second request” had been comparatively low below the Biden antitrust group, though in 2024 it rose again to a stage that had been widespread through the first Trump administration.
Finally, after these second requests, “The [Federal Trade] Commission took enforcement action against 18 transactions: 12 that the parties abandoned or restructured as a result of antitrust concerns raised during the investigation; and six that resulted in the Commission initiating administrative or federal court litigation. The [Antitrust] Division took enforcement action against 14 transactions: 12 that the parties abandoned in the face of questions from the Division; and two that were restructured after the Division raised concerns about the threat they posed to competition.”
In fact, it’s all the time laborious to attract linkages from enforcement efforts to outcomes, in antitrust as in different areas. The powerful speak from the Biden antitrust enforcers, their doctrinal arguments over what antitrust enforcement ought to be, and the particular instances the place they introduced enforcement actions certainly formed the sorts of mergers that companies have been keen to suggest. However with such results duly famous, it’s laborious to take a look at the uncooked variety of proposed mergers, proposed massive mergers, and enforcement efforts and interpret it as a pointy break from previous antitrust apply.
For individuals who need extra on antitrust doctrine, I’ve commented on this weblog every now and then concerning the Biden antitrust group, the brand new merger tips, some present antitrust instances, and the historic adjustments in merger legislation over time. A few of these posts embrace:
- “Structure-Conduct-Performance: An Earlier Generation of Antitrust” (February 11, 2025)
- “The Generic Drugs Antitrust Case” (March 15, 2024)
- “Initial Reactions to the Amazon Antitrust Case” (September 27, 2023).
- “Antitrust and the Consumer Welfare Goal” (July 31, 2023)
- “Complexifying Antitrust” (January 3, 2023)
- “Antitrust: Dilatancy Before the Earthquake?” (June 8, 2023)
- “Initial Reactions to the Amazon Antitrust Case” (September 27, 2023)
- “Did Antitrust Really Used to Be So Tough?” (February 19, 2022)
- “The AT&T Merger with Time Warner: Another Follow-up” (Could 3, 2023)
- “After that Big Merger, What Happened?” (April 12, 2023)
- “Antitrust in the Digital Economy” (July 19, 2019)
Additionally, the Winter 2025 problem of the Journal of Financial Views (the place I work as Managing Editor) has a three-paper symposium on “The 2023 Merger Guidelines and Beyond.”
